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Book review

4:   Power to the People

Vijay Vaitheeswaran Earthscan. Reviewed by Michael Gill

This book is full of surprises. Vaitheeswaran, who as energy correspondent with the Economist, believes in the free market of liberal economics and globalistion, puts forward a very convincing case for micro-generation and for the democratisation of energy supply. He does not, however, rule out large multinational companies holding a wide portfolio of many and varied micro-power generators. He believes that many forms of micro-power will soon be competitive with large conventional coal-fired generators at $1,000 per kilowatt.

He is very much in favour of the deregulation of the state-cosseted electricity businesses throughout the World. Deregulation has encouraged competitive new ideas that are reversing the assumptions that say big-station technology is more efficient, and has started to make people question the system of subsidies that underpin the production of energy from fossil fuels. [The International Energy Agency argues that the waste and inefficiency that subsidies have engendered in the electrified part of the economy have blocked expansion.]

Vaitheeswaran very much supports the conclusion of Amory Lovins in his book Small is Profitable where he points out that there are economic benefits in making electrical resources the right size. He says: "Energy investors are increasingly favouring small efficient power plants using other forms of distributed generation". He confirms that "Small is Beautiful"; he also shows that in a free market for energy, nuclear energy would not get a look in.

Vaitheeswaran sees a great future for fuel-cell batteries, and very much favours hydrogen as the preferred form for energy storage and as an energy carrier (though storage and transport techniques still need a lot of improvement). However, he favours a competitive approach to research so that a great proliferation of ideas can eventually produce a winner for any given situation.

He is a great supporter of the "Free Market" provided that all distortions that come from political pressure, subsidies, regulations and the ability of organisations to externalise costs are first eliminated to create a "level playing field".

He argues quite convincingly that these distortions are much better dealt with by fiscal measures in ways that influence the cost structure, such as resource taxation and the trading of internationally agreed pollution quotas than by regulations. I think that the Green Party should take a serious look at these ideas, because in the book Green Alternatives to Globalisation the authors seem to favour regulatory measures to try and change unsustainable practises in their "Green Marshall Plan". I think that like many politicians’ solutions, regulatory measures would lead to a bureaucratic nightmare. They have gone part-way to regulating by price by endorsing "Contraction and Convergence".

In this book Vaitheeswaran has introduced me to many new names and ideas in the struggle for supremacy in the energy industry. It has left me feeling far more hopeful that small-scale, locally distributed micro-generation can result in more democratic control of the enormous energy industry (which if the Third World is to benefit must be a minimum of four times its present size by 2050, and is at present a $2 trillion a year business), and therefore more optimistic about the future.

Most important, however, is that it is a very enjoyable read, full of amusing and personal insights into the business of energy production.

Michael Gill 26 September 2005

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